Contractor Insurance Coverage Adequacy Calculator
Evaluate whether your current insurance coverage is adequate for your contracting business based on project values, payroll, risk exposure, and industry benchmarks.
Formulas Used
Recommended General Liability (GL):
GLbase = max(Annual Revenue × 2%, $1,000,000)
GLrecommended = max(GLbase × Risk Factor × Location Multiplier × Sub Adjustment, Largest Project, $1,000,000)
Rounded up to nearest $500,000
Recommended Workers' Compensation Premium:
WC Premium = (Annual Payroll ÷ 100) × Class Rate
Class rates range from $4.50 (low-risk) to $18.00 (demolition) per $100 payroll, based on NCCI classification.
Recommended Umbrella / Excess Liability:
Required when: Revenue > $500K, Largest Project > $500K, or non-residential / subcontractor work
Umbrella = max(Revenue × 1.5, Largest Project × 2, $1,000,000), capped at $5,000,000, rounded to nearest $1M
Coverage Adequacy Score:
GL Score = min(Current GL ÷ Recommended GL × 100, 100)
WC Score = min(Current WC Premium ÷ Recommended WC Premium × 100, 100)
Umbrella Score = min(Current Umbrella ÷ Recommended Umbrella × 100, 100)
Overall Score = (GL Score × 40%) + (WC Score × 30%) + (Umbrella Score × 30%)